Once a creditor has a judgment against you they can then garnish your income and assets. You will not be given notice before your pay check is garnished or bank account is seized so this type of creditor action can be devastating to your financial life.
Most creditors cannot garnish your wages without first suing you in court and getting a money judgment. While there are a few exceptions to this rule such as for student loans, taxes, and child support, in most cases the creditor must file a lawsuit and win.
In Georgia, a judgment creditor can garnish your wages up to 25% of your disposable income, or the income you receive after paying taxes, medical insurance, and 401k savings. The ability to pay necessary expenses such as housing, food, and clothing are often directly impacted.
If the creditor chooses not garnish your pay check they can use their garnishment to seize the funds you have in your financial accounts. Creditors have third party services that allow them to find your bank accounts quickly after a judgment is entered. Once they serve your bank a copy of this judgment your account will be seized.
Fortunately, filing bankruptcy immediately stops garnishment and often discharges the amount owed pursuant to the judgment. Plus, any money that was taken from you through wage garnishment in the three months prior to filing bankruptcy can be recovered. So with either Chapter 7 bankruptcy or Chapter 13 bankruptcy, you can stop the garnishment in its tracks and get back the money that was taken from you.
In regards to your bank account being seized, once your bankruptcy is filed the bank will have to release the account (and your funds) back to you.
Once your bankruptcy case is filed the attorney and/or creditor that obtained the judgment against you will be notified immediately. They are required to file a release of the garnishment and send this notice to your employer or bank to notify them to stop all actions.